Sciarratta v. U.S. Bank Nat’l Ass’n,
247 Cal.App.4th 552 (Cal. Ct. App. 2016)
In this action for wrongful foreclosure, the homeowner, Monica Sciarratta, alleged that as a result of a void assignment of her promissory note and deed of trust, the entity that conducted a nonjudicial foreclosure sale on her home had no interest in either the underlying debt or the subject property.
In Yvanova v. New Century Mortgage Corp., (62 Cal.4th 919 (2016)), the California Supreme Court held that the homeowner has standing to sue for wrongful foreclosure.
However, Yvanova did not address “any of the substantive elements of the wrongful foreclosure tort,” and in particular did not address “prejudice . . . as an element of wrongful foreclosure.”
The issue this case presented was the question of “prejudice” left open in Yvanova: The Court of Appeal found that policy considerations that drove the standing analysis in Yvanova compelled a similar result in this case.
“[A] homeowner who has been foreclosed on by one with no right to do so -by those facts alone- sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure.
When a non-debtholder forecloses, a homeowner is harmed by losing her home to an entity with no legal right to take it.
Therefore under those circumstances, the void assignment is the proximate cause of actual injury and all that is required to be alleged to satisfy the element of prejudice or harm in a wrongful foreclosure cause of action.”
The opposite rule, urged by defendants in this case, would allow an entity to foreclose with impunity on homes that were worth less than the amount of the debt, even if there were no legal justification whatsoever for the foreclosure.
“The potential consequences of wrongfully evicting homeowners are too severe to allow such a result.”
The Court of Appeal reversed the judgment of dismissal entered after the trial court erroneously sustained a demurrer to Sciarratta’s first amended complaint without leave to amend, and remanded for further proceedings.
Wendland v. OneWest Bank, C070644
(Cal. Ct. App. May 15, 2019)
Our case is factually and procedurally different from Yvanova.
In that case, there was a purported assignment involving a bankrupted entity that could not have made an assignment, and thus, the assignment was void. Here, there was no void assignment. The claim here relates to the timing of the assignment.
Consequently, we are not faced with a situation where the foreclosing entity never obtained a valid assignment. Rather, the operative complaint establishes that the foreclosing entity obtained an assignment of the deed of trust a little more than a month after the foreclosure sale and four months before plaintiffs filed their original complaint in this case.
Thus, while the trustee deed may have been void on its face, the later assignment was not.
The circumstances presented in the instant case are more akin to a voidable assignment where, as the Yvanova court noted, ratification or validation by the parties to the assignment is available so that a plaintiff would not have a claim based on that assignment. (Yvanova, supra, 62 Cal.4th at p. 936 [“Unlike a voidable transaction, a void one cannot be ratified or validated by the parties to it even if they so desire”].)
Here, according to the FAC, the foreclosing entity, OneWest, is alleged to not have had a beneficial interest at the time of foreclosure. However, shortly after the foreclosure, and before this action was filed, OneWest was assigned a beneficial interest from the entity that had the beneficial interest at the time of the foreclosure, FDIC.
Plaintiffs have no claim based on the validity of that assignment.
Radoci v. Cit Bank, N.A.,
B271523 (Cal. Ct. App. Oct. 18, 2017)
Radoci lived with her grandmother in a home Radoci owned “free and clear.” In October 2007 Radoci borrowed $250,000 from IndyMac Bank, evidenced by a promissory note secured by a deed of trust. The note had a fixed interest rate of 7.125 percent and a 30-year repayment period. Radoci’s monthly payments were $1,400.
1. Because CIT later acquired IndyMac, where appropriate we refer to IndyMac as CIT.
On June 19, 2009 MERS recorded an assignment of deed of trust assigning its beneficial interest under the deed of trust to CIT, which was then-known as OneWest Bank. In a substitution of trustee, recorded on July 17, 2009, CIT substituted NDEx West, LLC as trustee.
In May 2012 NDEx, as CIT’s agent, recorded a “notice of default and election to sell under deed of trust.”
Radoci had fallen behind on her loan payments and owed $8,148.79 in arrears.